The worldcurrently seems to have entered the artificial intelligence (AI) era which future generations may one day refer to as before AI and afterAI.
What Do The Experts Say?Goldman Sachs (GS) Research estimatedAI investment is likely to peak at $200 billion globally by 2025 and $100 billion in the U.S.
GS Research economists Joseph Briggs and Devesh Kodnani believed the majority of AI investments will originate from hardware investment to train AI models and run AI queries, as well asincreased spending on AI-enabled software.
If these projections come true, AI-related investment couldsurge to as high as 2.5% to 4% of GDP in the U.S. and 1.5% to 2.5% of GDP in other major AI leaders.
Since many of these early winners are very large companies, the concentration of returns in the equity market this year has been extraordinarily high, GS Research Global Equity Strategist Peter Oppenheimer commented, citing concerns of a bubble.
Only 15 companiesaccounted for more than 90% of the returns of the S&P 500 Index from January through June 2023.
The company also believesthe world isin a new technology cycle which ishighly likely to lead to further outperformance in the sector. GS Researchaddedthe recent uptick in tech stock valuations clearly indicatedthat investors are waiting for higher future growth rates for these companies.
Also Read: Morgan Stanley Pioneers Wall Street's AI Revolution With OpenAI-Powered Assistant
A PRWireCenter report on Digital Journal estimatedglobal AI chip market growth at a CAGR of 38.5% during the period 2022-2028. Also, as per a Markets and Markets report, the global AI market is seen growing at a CAGR of 36.8% during the period 2023 to 2030.
Tech Sector Races Ahead of Broader Index: The Technology Select Sector SPDR Fund XLK posted a 37% jump on a year-to-date basis while the broader SPDR S&P 500 ETF Trust SPY saw a 16% surge in the same period. Rising interest in AI has led to a major rally in the tech sector with the evolution of Chat GPT leading the sectors growth significantly.
A quick look at notable players in the tech sector that aremanufacturers in theAI chips market includeQualcomm Inc QCOM saw a 3.3% year-to-date growth while Nvidia Corp NVDA skyrocketed 204% in the same period. Intel Corporation INTC and Advanced Micro Devices, Inc. AMD also saw significant surges of 36% and 59%, respectively. C3.ai IncAI grew 146% on a year-to-date basis.
Read Next:Google's Bard AI Chatbot Gets Smarter with Gmail, Google Docs, and YouTube Integration
Find out more about the AI sector and stay updated on the latest. Meet and engage with transformativeDigital Asset and Cryptobusiness leaders and investors at Benzinga's exclusive event:Future of Digital Assets. Tickets are flying:Get yours!